A Demand Charge for electricity is a billing technique which charges the user based on facility KW-Hrs over a particular time period requirements for plant power rather than the amount of power actually used. If, for example, peak usages in a given period which is typically 30 minutes, is 15 KW (kilowatts) the electricity generating utility must maintain generating capacity at 1.5 KW for the plant whether all this power is actually used or not. A fixed demand window refers to the fact that the demand values calculated for a given time in sequential time periods, with the largest power requirement then being used for billing purposes. Typically, the demand charge will be between 30% and 80% of the total electric bill. Therefore, reducing the demand charge is a cost effective approach in reducing overall production costs.
Special purpose electronics and/or computer systems have been utilized to forecast and control purchased power versus generated power. Many of these systems accomplish this objective by a method known as load shedding.